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This article is the second part of a two-part series on penalties after incorporation of a company. You can read the first part of the article Penalties After Incorporation- Part I 

Chapter VII to Chapter XII

No Section No and Description Defaulting party Civil Liability Criminal Liability

(Imprisonment)

34) Sec 88 – Failure to maintain a register of members/debenture-holders/security holders Company

Every officer in default

Min: INR 50 thousand

Max: INR 3 Lakhs
Continuing failure- INR 1 thousand for every day of default

35) Sec 89 – Failure to make a declaration in respect of a beneficial interest in any share.

Failure to file return pertaining to the declaration with the registrar.

Person

Company and Every officer in default.

Max: INR 50 thousand

Continuing failure- INR 1 thousand for every day of default

Min: INR 500

Max: INR 1 thousand

Continuing failure- INR 1 thousand for every day of default.

36) Sec 91- Closure of register of members or debenture holders or other security holders without notice/shorter notice/ in excess of limits prescribed. Company and Every officer in default. INR 5 thousand for every day of default

Max: INR 1 Lakh

37) Sec 92 – Failure to file annual return. Company

Every officer in default.

Min: INR 50 thousand

Max: INR 5 Lakhs
Min: INR 50 thousand

Max: INR 5 Lakhs

Max: 6 months

OR

Both

38) Sec 94 – Refusal of Inspection or making a copy/extract. Company and Every officer in default. INR 1 thousand for every day of default

Max: INR 1 Lakhs

39) Sec 99- Default in complying with

Sec 96 – AGM

Sec 97 – Power of the tribunal to call AGM.

Sec 98 – Power of a tribunal to call meetings of members

OR

Orders of Tribunal.

Company and every officer in default Max: INR 1 Lakh

Further INR 5 thousand for every day of default

40) Sec 102 – Failure to comply with provisions related to statement to be annexed to notice calling a meeting Every promoter/director/manager/KMP in default INR 50 thousand

or

5 times the benefit accruing to the persons mentioned in column (3) or any of their relatives

Whichever is higher

41) Sec 105 – Failure to mention members eligibility to appoint a proxy.
Wilfully/knowingly issues the invitation to appoint a proxy.
Every officer in default

Every officer in default

Max: INR 5 thousand

Max: INR 1 Lakh

42) Sec 111 – Failure to circulate members’ resolution Company and every officer in default INR 25 thousand
43) Sec 117- Failure to file the resolution and agreement. Company

Every officer in default(including liquidator)

Min: INR 5 Lakhs

Max: INR 25 Lakhs

Min: INR 1 lakh

Max: INR 5 Lakhs

44) Sec 118 – Failure to maintain the minutes of proceedings of the general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot.

Guilty of tampering with the minutes of the proceedings of the meeting.

Company

Every officer in default

Person

INR 25 thousand

INR 5 thousand

Min: INR 25 thousand

Max: INR 1 Lakh &

Max: 2 years
45) Sec 119 – Refusal to inspect or copies not furnished within the specified time. Company

Every officer in default

INR 25 thousand
INR 5 thousand
46) Sec 121 – Failure to file the report on AGM before the expiry of a specific period. Company

Every officer in default

Min: INR 1 lakh

Max: INR 5 Lakhs
Min: INR 25 thousand

Max: INR 1 Lakh

47) Sec 124 – Default in complying with provisions related to Unpaid Dividend Account Company

Every officer in default

Min: INR 5 lakhs

Max: INR 25 Lakhs

Min: INR 1 Lakh

Max: INR 5  Lakhs

48) Sec 127- Punishment for failure to distribute dividends. Every director in default

Company

INR 1 thousand for every day of default &
Simple Interest @ 18% p.a during the period for default continues
Max: 2 years
49) Sec 128 – Failure to comply with the provision relating to maintenance of books of accounts etc by the company. -Managing director

-Whole time director in charge of finance

-Chief Financial Officer or such other person

Min: INR 50 thousand

Max: INR 5 Lakh

OR

Max: 1 year

OR

Both

50) Sec 129 – Failure to comply with provisions relating to proper disclosure of financial statements -Managing director

-Whole time director in charge of finance

-Chief Financial Officer or such other person in charge(as appointed by the board

In the absence of any of the officers mentioned all the directors.

Min: INR 50 thousand

Max: INR 5 Lakh

OR

Max: 1 year

OR

Both

51) Sec 134 – Contravention of the provisions relating to Financial Statements, Boards Report Etc Company

Every officer in default

Min: INR 50 thousand

Max: INR 25 Lakhs

Min: INR 50 thousand

Max: INR 5 Lakh

OR

Max: 3 years

OR

Both

52) Sec 136 – Denial of the right of the member to inspect copies of the audited financial statements. Company

Every officer in default

INR 25 thousand

INR 5 thousand

53) Sec 137- Failure to file the copy of financial statements with the registrar. Company

Managing Director and Chief Financial officer

In their absence any director charged by the board with the responsibility

In the absence of such director all directors

INR 1 thousand for every day of default

Max: INR 10 Lakhs
Min: INR 1 Lakh

Max: INR 5 Lakh

OR

Max: 6 Months

OR

Both

54) Sec 140- Failure of the auditor to file the notice on resignation, with the company and registrar & also the C&AG in case of government companies.

The right of representation abused/auditor has acted in a fraudulent manner

Auditor

Auditor

Min: INR 50 thousand

Max: INR 5 Lakhs

Min: Amount involved in the fraud

Max:3 times the amount involved &

Min: 6 Months

Max: 10 Years

*Fraud involving public interest:

Min: 3 years

55) Sec 143 – Failure of the auditor to report fraud by employees against the company Auditor

Cost Accountant

Company Secretary

Min: INR 1 Lakh

Max: INR 25 Lakhs

56) Sec 147 – Contravention of Sec 139 to 146(aspects related to audit and auditors)

Contravention of Sec 139/143/144/145
Contravention of  provisions knowingly/willfully with the intention to deceive the company or its shareholders or creditors or tax authorities

Company

Every officer in default

Auditor

Auditor

Min: INR 25 thousand

Max: INR 5 Lakhs
Min: INR 10 thousand

Max: INR 1 Lakh

OR
Min: INR 25 thousand

Max: INR 5 Lakhs
Min: INR 1 lakh

Max: INR 25 Lakhs &

Max: 1 year

OR

Both

Max: 1 year

57) Sec 148 – Default in complying with the orders of the Central Government pertaining to cost audit Company

Every officer in default

Cost Auditor

Min: INR 25 thousand

Max: INR 5 Lakhs

Min: INR 10 thousand

Max: INR 1 Lakh

OR
Min: INR 25 thousand

Max: INR 5 Lakhs

Max: 1 year

OR

Both

58) Sec 157 – Failure by the company to inform DIN to Registrar. Company

Every officer in default

Min: INR 25 thousand

Max: INR 1 Lakh
Min: INR 25 thousand

Max: INR 1 Lakh

59) Sec 159- Contravention of:

Sec 152- appointment of directors,

Sec 155-Prohibition to obtain more than one DIN and

Sec 156-Director to intimate DIN

Individual/Director INR 50 thousand OR
Further, a fine of INR 500 for every day of default.
Max: 6 months
60) Sec 165 – Contravention of maximum no. of directorships The person accepting appointment as director Min: INR 5 thousand

Max: INR 25 thousand for every day during which the contravention continues

61) Sec 166 – Contravention of duties of directors. Director Min: INR 1 Lakh

Max: INR 5 Lakhs

62) Sec 167 – Functioning as director after attaining disqualification. Director Min: INR 1 Lakh

Max: INR 5 Lakhs

OR

Max: 1 year

OR

Both

63) Sec 172 – No specific punishment under chapter XI Company & every officer in default Min: INR 50 thousand

Max: INR 5 Lakhs

64) Sec 178 – Contravention of provisions of Sec 177 related to Audit committee and nomination and remuneration committee and stakeholders relationship  committee Company

Every officer in default

Min: INR 1 lakh

Max: INR 5 Lakhs
Min: INR 25 thousand

Max: INR 1 Lakh

OR

Max: 1 year

OR

Both

65) Sec 182- Political contribution made in excess of the limits Company

Every officer in default

5 times the amount contributed
5 times the amount contributed &
Max: 6 months
66) Sec 184 – Failure to disclose interest held by directors in any company/contract/arrangement Director Min: INR 50 thousand

Max: INR 1 Lakh

OR

Max: 1 year

OR

Both

67) Sec 185 – Loan to directors/any other person in whom the director is interested/give a guarantee in connection with the loan taken by the director or such other person in contravention of the provisions of this section Company

Director/any other person

Min: INR 5 Lakh

Max: INR 25 Lakh
Min: INR 5 Lakh

Max: INR 25 Lakh

OR

Max: 6 months

OR

Both

68) Sec 186-Contravention of provisions pertaining to loan and investment by the company. Company

Every officer in default

Min: INR 25 thousand

Max: INR 5 Lakhs

Min: INR 25 thousand

Max: INR 1 Lakh &

Max: 2 years
69) Sec 187- Contravention by the company regarding investments of the company to be held in its own name. Company

Every officer in default

Min: INR 25 thousand

Max: INR 25 Lakhs

Min: INR 25 thousand

Max: INR 1 Lakh

OR

Max: 6 months

OR

Both

70) Sec 188 Contract entered into/ authorised in contravention with the provisions outlined under the section-Related party transactions. Listed Company:

Violation by Director/any other person
Other Company:

Violation by Director/any other person

Min: INR 25 thousand

Max: INR 5 Lakhs OR

Min: INR 25 thousand

Max: INR 5 Lakh

Max:1 year

OR

Both

71) Sec 189 – Failure to disclose the interest of the director in any contract/arrangement Director INR 25 thousand 72)Sec 190 – Failure to maintain a copy of the contract of employment with managing director or whole time director/written memorandum in absence of a written contract & also failure to keep it open for inspection without fee

Company

Every officer in default

INR 25 thousand
INR 5 thousand for each default

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